The fragmentation is annoying for those who like to have great devices with the most current OS. Sure, it caters to the “hacker” but they represent a minority.
Couple the fragmentation with the reality that Google makes very little money on Android and you have a model that is not sustainable in the long-term.
Google isn't making much money, the developes are making very little money, and the manufacturers are paying ~$10 royalties to Microsoft for every unit they sell, and it looks like Apple and Oracle may also be getting some royalty money in the not-too-distant future.
We both don't see this model as sustainable for the long-term.